Patents and Innovation Economics

The Great Patent Debate: The Untold Story

There are zillions of stories complaining about how some innocent multinational company is being sued for patent infringement by some evil company that does not even make a product. However, you never hear of the story of the start-up company that has filed for a patent, gotten the run around by the Patent Office and could not raise funding because their patent has not issued. Well here is one of these stories, which are much more numerous than the supposed lawsuit problem.

This company was founded in 2003 by a cardiothoracic surgeon and two engineers. Their invention is a product and service that could save the U.S. as much as a $1 Billion a year in heart related procedures. The inventors filed a patent in 2004 probably spending as much as $10K of their limited capital. They then performed various experiments including arranging animal trials with a major veterinarian university. The animal trials were overwhelming successful and most cardiothoracics surgeon would have thought their results impossible. In 2007, the company filed a continuation-in-part to incorporate their new information. The company waited two years for the patent office to finally examine their patent application. The patent office’s rejection showed that they did not understand the basic concept behind the invention. Despite numerous interviews with the examiner and the supervisor, they continued to cite even more outrageous prior art references that taught away from the company’s invention or were just plain irrelevant. A key insight of the invention is that it did not cauterize or damage the tissue near a puncture. Every other reference showed this feature. The patent office provided absurd definitions for words in order to reject the claims. For instance, they suggested the word “punch” meant rotation.

The company raised these issues with the examiner, the examiner’s supervisor, and the head of the group art unit. None of these people was willing to listen to reason. Finally, the company filed four affidavits. Two were from medical doctors who treat heart conditions, one was a veterinarian who performed the experimental surgery and one was from a professor of communications who specializes in technical and scientific communications. All the doctors stated that the company’s invention was revolutionary, was not at all like the prior art, and likely to lead to tremendous improvements in heart procedures. The professor of communications explained that the patent office’s interpretation of the terms in the patent did not pass the laugh test. Finally, the examiner relented and allowed four of the claims, while citing new prior art against the other claims. This new art was introduced after two years and five responses and one preappeal, which cost the company its start-up capital and lost time.

The human cost to this bureaucratic inefficiency (ineptitude) included the fact that one of the people the company hired to find financing died of a heart attack while waiting on the patent office. The surgeon-inventor’s daughter, who had helped out with the company, died in surgery while waiting on the patent office, and the surgeon had a couple of heart related procedures. If the surgeon could have substituted his invention for the standard treatments, he would not have had to undergo multiple procedures. However, this just scratches the surface of the cost of this bureaucratic nightmare. If this company had received its patent efficiently and timely, it would have created tens of hundreds of jobs and saved the lives of thousands of heart patients and saved millions of dollars spent on medical care.

This is just one example of the problems created by underfunding the patent office and politicizing the patent process. There are hundreds of thousands of these stories – at least ten times as many as the legitimate complaints about frivolous patent lawsuits. These cases are much more damaging to our economy, but the press and open source anarchists have captured all the attention. We need to focus on the real problems with the patent system, which includes underfunding the patent office and a non-objective standard for what is patentable. That is untold story of the Great Patent Debate.

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I don’t understand the whole human tragedy angle. It’s very sad, but why couldn’t they have performed this miracle surgery on needy patients anyway? The USPTO has no legal authority over surgical devices, I would imagine the FDA does, if anyone. The minute their patent application is filed, their invention is protected by the filing date and they could have started producing and using the surgical device without worrying about someone stealing it.

In a free country/market your comment would make sense, but we don’t live in such a place.
The FDA requires a very expensive approval process for any new surgical procedure and device. Without FDA approval no hospital will allow the procedure to be performed on their premises and surgeons will not perform the procedure because they cannot get paid from insurance without FDA approval. Not to mention that it will cost money and time to train surgeons.

Thus, without a patent it is very difficult to get funding. Without funding the device/procedure cannot go through the expensive human trails required by the FDA. Without FDA approval there is no miracle surgery.

I actually considered the funding issue but didn’t want to get too long or complicated in my previous post, but even after your response, and not to take anything lightly the pain and suffering of everyone involved, it’s still a bit overly optimistic this surgery could have helped anyone.

The timeline: they filed a continutation-in-part in 2007, examination begins 2009 (“waited two years”) and I assume recently in 2011 they had 4 claims allowed.

To start, they can’t really blame the examiner for having “waited two year”, since I am sure he/she is required to examine the patent proximate the order they were filed in order to be fair to all applicants. Say everything proceeds normally, and they get their patent issued a year later for a total of 3 years in 2010.(Average patent pendency is 34.6 months according to USPTO http://www.uspto.gov/patents/stats/patentpendency.jsp)

Does this timeline really give enough time to save the inventor’s daughter, business partner and help him/herself? They have to subseqently obtain funding and then perform at least small-scale human trials (which I am sure would be a pre-requisit for FDA approval), then get FDA approval (a process that could also take months if not longer), and finally begin producing and marketing the new device, and train surgeons. Unless everything post-patent goes absolutely perfectly and both the daughter and partner passed away very recently, it just doesn’t seem likely this surgerical procedure would have helped them.

so lets say they had received a patent earlier, say only 1.5 years following the opening Non-Final rejection issued by the office. That would provide for an additional year for the applicant to seek funding now with patent in hand and start the FDA process. As Chuckles discusses above, it is a rather unlikely time frame and quite frankly careless and reckless for you to suggest that the death of the inventor’s daughter or the employee in charge of seeking financing caused by the patent office is absurd.

Here is a question for you, who was the prosecuting patent attorney for this application? Do you know if the attorney was “inept” in drafting claims and/or the actual written disclosure? You reference the cited art as being irrelevant and teaching away from the invention, but what was actually claimed. The non-cauterizing procedure seems to me like a negative limitation. These are very difficult to support during prosecution because in most cases the specification lacks support for teaching the invention does not do something.

The patent office was inept – as clearly pointed out by the Affidavits.

I never said that the PTO caused their deaths. But what the PTO’s delay did do was thwart this people’s dreams and made their lives less fulfilling. However, it did cause the deaths of numerous potential patients.

“Open source anarchists”? Really? You do know that most of the FLOSS proponents DO NOT want to get rid of all copyrights, for example? And most would agree that some kind of incentive for inventions would be needed.
It’s just a matter of scrapping the current dysfunctional system and replacing it with something that works (although the scope of the change and to change to is the big problem), something you yourself is arguing for right here.